FSA Chief Questions Utility of CDS Market

By

Paul Hannon

Updated March 9, 2010 12:36 p.m. ET

LONDON—The U.K.'s chief financial regulator said there are "major questions" about the utility of the market for credit-default swaps, in particular whether they should be used by investors that don't own the underlying debt instruments.

Some policy makers have suggested that speculators have been using such swaps, known as CDS, to bet that Greece would struggle or be unable to pay off its heavy debt load, and that such speculation has made it difficult for the Greek government to raise the funds it needs in the...